As a tenant, you are unable to use your home as collateral in a loan application. Tenant loans are perfect in this situation because they are designed specifically for people like you. In many ways, it could be said to be an easier application process than with a secured loan for a homeowner because you won't need to get involved with arranging an independent valuation of the property, solicitors, searches etc and all of the obvious costs that come with this type of finance.





Whilst unsecured loans and tenant loans may be easier to apply for, they are not necessarily easier to get. The major factors at work are generally affordability of the loan and your previous credit history. Let's look at each of these in more detail?



Affordability



When a lender is considering whether to lend money to you, they are going to take a responsible view of the situation. Do you have enough disposable income to be able to make the monthly repayments? They will probably run a quick income and expenditure account with you. They will look at your regular income and set this against your regular monthly outgoings and the difference will be used to calculate if there is enough to meet the repayments on your proposed loan.



It's also important for them to know if you are stable in your employment. Someone who moves around in the job market in a comparatively irregular, frequent and haphazard way is potentially a concern to them as this type of individual is statistically more likely to become unemployed than someone who is more measured about their employment.



Credit History



Every time that you apply for finance including unsecured loans, tenant loans, mortgages, credit cards, store cards etc, a record is made in your personal credit file. This can be accessed with your permission, by any prospective lender by applying for your records through a credit reference agency such as Experian or Equifax. Without your permission, the lender will almost certainly refuse your application.



This record will show not only how many applications for finance you have made but with each credit agreement that you have or have had in the past, it will show whether you met every repayment or went into arrears, defaulted or had a CCJ recorded against you for non repayment. Clearly this is potentially very important information for a lender in the decision making process. It helps them to decide whether you are a high or low risk in terms of them getting their money back. If you are a high risk because you have a CCJ against your name, it doesn't necessarily mean that you won't be able to find an unsecured loans lender to help but it may mean that they reduce the amount of money that they are prepared to lend to you or increase the interest rate on the loan to reflect the greater risk they may face.



It is worth being realistic when you are considering applying for a loan. Never lie about your circumstances as apart from being illegal to do so, the lender will always find out. Pick a finance broker that has access to a wide range of tenant loans lenders so that they can help you to find the right one for you and you will have a far greater chance of being successful. Good luck with your application.

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